INDIANA: Public vote on school tax shelved

A proposal for a large tax increase requiring approval of Indiana Area School District voters has been canceled by the school board.

The directors unanimously voted Monday to rescind a vote cast on Oct. 28 that called for asking district residents to approve a 12 mill real estate tax increase in a referendum in the spring primary.

Instead, the board directed district administrators to prepare a budget that would limit the property tax increase to the amount allowed under the local economic index without voter approval.

On a divided vote, the board agreed to ask Pennsylvania Department of Education approval of an additional increase to recover excess contributions to the pension plan, without voter approval, under an exception granted in the state school tax law.

At most, the tax increase would be about 4.63 mills, which would increase the bill for the average property owner by $98.62.

The school board also accepted the resignation notices of 22 teachers and voted to approve a change in policy language that reflects the realignment of the grade levels attending the district’s four elementary schools.

By capping the possible tax increase, the board will rely on savings through attrition — allowing about 10 vacancies created by teacher retirements to go unfilled — to balance the 2014-15 budget.

In October, the board called for raising the tax 12 mills to help pay for additional teachers so the district could reduce class sizes to optimum levels in the four elementary schools, in response to pleas from district residents — especially parents and students — to keep the current alignment. Students in pre-kindergarten through fifth grade attend Horace Mann, Dwight Eisenhower, Ben Franklin and East Pike schools.

But the board voted in the fall for a realignment of the schools that would concentrate the grade levels in two buildings, which would result in smaller classes with the same number of teachers. The realignment was intended as a way to reduce class sizes at a lower cost if voters rejected the tax increase needed to maintain status quo.

Under the new attendance plan, which will take effect in the fall, pre-kindergarten through third-grade students will attend Ben Franklin and East Pike, and fourth- and fifth-grade students will attend Horace Mann and Eisenhower elementary schools.

Debate over the budget Monday night began with director Robert Gongaware’s motion to pass a resolution to limit the tax increase to the local index rate of 2.5 percent — or 2.63 mills — which, if approved, would automatically have voided the October proposal for a voter referendum.

District Superintendent Dale Kirsch said the board could make ends meet with a 2.5 percent increase, but directors wondered whether the district would need the leeway of additional mills allowed under an exception if Gov. Tom Corbett proposes less state aid than the district is expecting.

The exception could be about 2 mills.

“Can we, with the decisions already made to reduce positions, fund the district under this motion? Or how seriously do we need to keep the option of the exceptions?” asked director John Uccellini. “I don’t want to tie our hands to 2.5 percent, and realize that we need additional money and have to go back and cut additional programs, when we already have cut as much as I would ever want to see us do in this district.”

“If we reduce approximately 10 positions and save $1 million out of the budget, and just increase the tax to the index, we’re in very good shape,” Kirsch said. “Barring any unknowns about what the state may do with funding … if they don’t cut our funding, we still will be OK. The unknown is what the governor will propose in February and what the Legislature will approve in late June or July.”

Kirsch said history shows that the state has not cut school funding in election years, such as 2014.

Kirsch also said the board would lose all its options for a greater tax increase by voting now to adhere to the 2.5 percent limit.

After some discussion over the level of support for a 12 mill tax increase that board members had heard from district residents, director Diana Paccapaniccia called for board members to vote on whether they supported it.

“I think the board needs to own the referendum, and really support it and go out and sell it to the public. And that’s what I do not see from the past board or this current board — we do not want to sell a 12 mill increase to the public, we kind of just offered it to them,” Paccapaniccia said. “I don’t think the board has owned the referendum.”

“We had numerous public hearings and we heard from the public about how they would support tax increases to maintain the current alignment, from person after person after person,” board President Thomas Harley said. “In hearing that, my support of the referendum was that there was that support for the education system we have and to pay for it with that kind of millage.

“What has happened is that it passed. Those people stopped talking. And here we are tonight with realignment being confirmed and there were two people making public comment, but nothing about realignment.”

Paccapaniccia’s next motion for the district to follow the Act 1 state tax law guidelines and come up with a preliminary budget by February, to be funded with a tax increase up to 4.63 mills, passed 5-4 with directors voting the same way as on the earlier motion to table the 2.5 percent tax hike limit.

Opponents said the district should commit to following the index.

Petersen noted that the board in past years had asked for permission to use exceptions for higher tax increases, yet held the tax hike to the economic index.

“I’d like to see us this year move to lock in the index,” Petersen said. “Our budget projections out the next three years have our tax increase maxed at the index, or show no tax increase. I’ve seen both of those projects. I would like to see us move forward with the 2.5 percent, it would send a nice message to the taxpayers.”

Before considering the budget motions, the board accepted with regret the resignations of 22 educators, many of whose salaries apparently will be diverted to other district costs and enable the board to limit the tax increase.

Chauncey Ross is the Gazette’s fixture at Indiana Area and Homer-Center school board meetings, has been seen with pen and notepad in area police stations and courts, and is something of an Open Records Act and Sunshine Law advocate. He also manages the Gazette’s websites and answers your questions about them.
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